Income Tax Bill

House of Commons

Session 2006 - 07
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Other Bills before Parliament

Income Tax Bill

Income Tax Bill
Part 15 — Income Tax Acts definitions etc
Chapter 1 — Definitions
465

(b)
by reference to any class or description of stock exchanges (including
one framed by reference to any authority or approval given in a country
outside the United Kingdom).
(3)
An order under this section may—
(a)
contain incidental, supplemental, consequential and transitional
5
provision and savings, and
(b)
vary or revoke a previous order under this section.
940
Meaning of “research and development”
(1)
This section has effect for the purposes of the provisions of the Income Tax Acts
which apply this section.
10
(2)
“Research and development” means activities that fall to be treated as research
and development in accordance with generally accepted accounting practice.

This is subject to subsection (3).
(3)
The Treasury may by regulations specify activities which—
(a)
are to be treated as being “research and development” for the purposes
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of this section, or
(b)
are to be treated as not being “research and development” for the
purposes of this section.
(4)
The regulations may—
(a)
make provision by reference to guidelines issued by the Secretary of
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State, and
(b)
contain incidental, supplemental, consequential and transitional
provision and savings.
(5)
Unless otherwise expressly provided, “research and development” does not
include oil and gas exploration and appraisal.
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941
Meaning of “unit trust scheme”
(1)
In the Income Tax Acts “unit trust scheme” has the meaning given by section
237 of FISMA 2000.

This is subject to subsection (2).
(2)
The Treasury may by regulations provide that a unit trust scheme within the
30
meaning given by section 237 of FISMA 2000 is not to be a unit trust scheme for
the purposes of this section if the scheme is within a specified description.
(3)
The regulations may contain incidental, supplemental, consequential and
transitional provision and savings.
(4)
This section does not apply for the purposes of section 558 (approved
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charitable investments).

Income Tax Bill
Part 15 — Income Tax Acts definitions etc
Chapter 2 — Other Income Tax Acts provisions
466

Chapter 2
Other Income Tax Acts provisions
942
Scotland
(1)
In the application of the Income Tax Acts to Scotland—
“assignment” means an assignation,
5
“estate in land” includes the land, and
“surrender” includes renunciation.
(2)
In the application of the Income Tax Acts to Scotland, any reference to property
or rights being held on trust or on trusts is a reference to the property or rights
being held in trust.
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943
Sources of income within the charge to income tax or corporation tax
In the Income Tax Acts a source of income is within the charge to income tax
or corporation tax if that tax—
(a)
is chargeable on the income arising from it, or
(b)
would be so chargeable if there were any income arising from it,
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and references to a person, or income, being within the charge to income tax or
corporation tax are to be read in the same way.
944
Application of Income Tax Acts to recognised investment exchanges
The Commissioners for Her Majesty’s Revenue and Customs may by
regulations make provision securing that provisions in the Income Tax Acts
20
which contain references to the Stock Exchange apply—
(a)
in relation to all other recognised investment exchanges (within the
meaning of FISMA 2000), or
(b)
in relation to such of those exchanges as may be prescribed,
for such purposes and subject to such modifications as may be prescribed.
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945
References to married persons, or civil partners, living together
Individuals who are married to, or are civil partners of, each other are treated
for the purposes of the Income Tax Acts as living together unless—
(a)
they are separated under an order of a court of competent jurisdiction,
(b)
they are separated by deed of separation, or
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(c)
they are in fact separated in circumstances in which the separation is
likely to be permanent.
946
Relationship between rules on highest part of total income
(1)
This section makes provision about the relationship between rules requiring
particular income to be treated as the highest part of a person’s total income.
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(2)
It has effect for the purposes of the Income Tax Acts except sections 535 to 537
of ITTOIA 2005 (gains from contracts for life insurance etc: top slicing relief).

Income Tax Bill
Part 15 — Income Tax Acts definitions etc
Chapter 2 — Other Income Tax Acts provisions
467

(3)
If more than one of the provisions listed in subsection (4) applies in relation to
a person, a provision mentioned earlier in the list has priority over a provision
mentioned later in the list.
(4)
The provisions are—
section 465A of ITTOIA 2005 (gains from contracts for life insurance etc to
5
be treated as highest part of total income),
section 404A of ITEPA 2003 (payments and other benefits on termination
of employment to be treated as highest part of total income), and
section 16 (savings and dividend income to be treated as highest part of
total income).
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(5)
The provisions listed in subsection (4) have priority over—
section 619A(2) of ITTOIA 2005 (income treated as highest part of settlor’s
total income),
section 701(6) and (7) (income treated as arising under Chapter 3 of Part
12 to be treated as highest part of total income),
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section 719(6) and (7) (income treated as arising under Chapter 4 of Part
12 to be treated as highest part of total income), and
any other provisions of the Income Tax Acts requiring income of any
description to be treated as the highest part of a person’s total income.
(6)
The effect of one provision having priority over another is that the second
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provision has effect subject to the first.
947
Territorial sea of the United Kingdom
The territorial sea of the United Kingdom is treated for the purposes of the
Income Tax Acts as part of the United Kingdom.
948
Orders and regulations
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(1)
This section applies to all powers under the Income Tax Acts of the Treasury
or the Commissioners for Her Majesty’s Revenue and Customs to make orders
or regulations, other than excluded powers.
(2)
All powers under the following are excluded—
(a)
ICTA (see instead section 828 of that Act),
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(b)
section 178(5) of FA 1989 (setting of rates of interest),
(c)
CAA 2001 (see instead section 570B of that Act),
(d)
ITEPA 2003 (see instead section 717 of that Act),
(e)
Part 4 of FA 2004 (see instead section 282 of that Act),
(f)
ITTOIA 2005 (see instead section 873 of that Act), and
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(g)
the following provisions of this Act—
(i)
section 184(3)(b) and (c) (EIS: the unquoted status requirement
(designated exchanges etc)),
(ii)
section 295(3)(b) and (c) (venture capital trusts: the unquoted
status requirement (designated exchanges etc)), and
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(iii)
section 939(1)(b) (meaning of “recognised stock exchange”).
(3)
Any orders or regulations made under a power to which this section applies
must be made by statutory instrument.

Income Tax Bill
Part 15 — Income Tax Acts definitions etc
Chapter 2 — Other Income Tax Acts provisions
468

(4)
Any orders or regulations made under a power to which this section applies
are subject to annulment in pursuance of a resolution of the House of
Commons.
(5)
Subsection (4) does not apply if the order or regulations are made under—
(a)
section 73A of FA 2004 (exemption for designated international
5
organisations), or
(b)
any of the following provisions of this Act—
(i)
section 21(5) (indexation of starting rate limit and basic rate
limit),
(ii)
section 57 (indexation of allowances),
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(iii)
section 114 or 735 (exclusion of amounts in calculating
individual’s contribution to the firm),
(iv)
section 400(4)(e) (amounts treated as contributed by an
individual to investment partnership capital),
(v)
section 830 (public revenue dividends: regulations about
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collection of income tax),
(vi)
section 895 (regulations modifying Chapter 15 of Part 14),
(vii)
section 912 (designated international organisations: exceptions
from duties to deduct),
(viii)
section 925(2)(e) (meaning of “bank”), or
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(ix)
section 963(2) (power to make transitional or saving provision
in connection with coming into force of this Act).
(6)
Further, subsection (4) does not apply—
(a)
if any other Parliamentary procedure is expressly provided to apply in
relation to the order or regulations, or
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(b)
if the order in question appoints a day for the purposes of any provision
of the Income Tax Acts from which the provision will have effect (with
or without amendments) or will cease to have effect,

and is also subject to any other provision to the contrary.
949
Territorial scope of charges under certain provisions to which section 950
30
applies
(1)
This section applies in relation to any amount chargeable to income tax under
or by virtue of any provision—
(a)
to which section 950 applies, and
(b)
which is listed in Part 2 or 3 of the table in that section (provisions not
35
in ITTOIA 2005).
(2)
An amount arising to a UK resident is chargeable to tax whether or not it is
from a source in the United Kingdom.
(3)
An amount arising to a non-UK resident is chargeable to tax only if it is from a
source in the United Kingdom.
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(4)
References in this section to amounts which are from a source in the United
Kingdom include, in the case of any amount which does not have a source,
references to amounts which have a comparable connection to the United
Kingdom.
(5)
This section is subject to any express or implied provision to the contrary in any
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provision of the Income Tax Acts.